Monitoring active listings and months of supply is crucial when evaluating home price momentum. A surge in active listings, especially as homes stay on the market longer, often signals potential price declines. Conversely, a sharp drop in listings may indicate a market heating up.
As of October 2024, national active inventory for sale had risen 29% compared to October 2023. Despite this increase, inventory remains 21% below October 2019 levels. This trend suggests a nationwide market softening, as buyers are not purchasing homes as quickly as before.
Over the past year, buyers have gained more leverage in most resale markets, with some areas transitioning into buyers’ markets. While active listings have increased across nearly all regions, the most significant growth has been concentrated in the Sun Belt.
The Sun Belt Leads in Inventory Growth
Many Sun Belt markets are seeing larger inventory spikes due to a higher concentration of new construction. Homebuilders in these areas, leveraging their profit margins, can offer affordability adjustments like mortgage rate buydowns. These incentives attract buyers who might otherwise opt for resale properties. Combined with affordability challenges from the pandemic housing boom and rising mortgage rates, this shift has contributed to longer days on market, higher months of supply, and growing active listing counts.
However, some Sun Belt markets, especially around the Gulf, face additional challenges. Home insurance shocks and reduced migration driven by the pandemic/remote work boom have dampened demand. In Florida, for example, the condo market is experiencing its own set of disruptions.
Inventory Levels: A Regional Perspective
While active housing listings are rising year-over-year in most markets, inventory remains below pre-pandemic levels in many areas. This rebound in inventory may represent a much-needed correction after the tight and unsustainable conditions of the pandemic housing boom.
Regions like the Midwest, Northeast, and Southern California continue to have inventory levels below pre-pandemic norms. In contrast, areas such as the Gulf Coast (including Tampa and New Orleans) and parts of the Mountain West have surpassed pre-pandemic inventory levels.
Shifts in Market Power
Among the 50 largest housing markets, Austin stands out as a city where buyers have gained the most leverage in the past five years. Meanwhile, Hartford, Connecticut, remains a stronghold for sellers.
Generally, markets with inventory levels returning to or exceeding pre-pandemic norms have seen weaker home price growth—or even declines—over the past two years. Conversely, markets with inventory still far below pre-pandemic levels have typically experienced stronger price appreciation.
This evolving dynamic highlights the significant role inventory plays in shaping market power and price trends, signaling that the balance of power is shifting steadily toward homebuyers in many regions.
Florida’s Condo Market Faces Price Correction Amid Rising HOA Fees and New Safety Regulations
Following the tragic Surfside condo collapse in June 2021, which claimed 98 lives, Florida enacted stricter structural safety laws. These new rules mandate more frequent costly inspections and require condo associations to set aside larger reserves for repairs by the end of 2024. To meet these requirements, many homeowners' associations (HOAs) have implemented significant fee increases, adding financial strain to condo owners across the state.
This added burden, combined with the effects of inflated home prices during the pandemic housing boom and surging mortgage rates, has pushed much of Florida’s coastal condo market—particularly older buildings—into correction territory.
Condo Prices See Steep Declines
According to a ResiClub analysis, condo prices are down year-over-year in 18 of Florida’s 25 largest metro markets. In contrast, single-family home prices have fallen year-over-year in just six of those markets. In 24 out of 25 Florida metro areas, condos have experienced weaker price performance compared to single-family homes.
Statewide and National Trends
Nationally, condo values are up 2.4% year-over-year, while single-family home values have risen by 3.5%. However, Florida’s condo market struggles stand out.
Among the 300 largest U.S. housing markets, the steepest year-over-year declines in condo values include:
Lafayette, LA: -9.1%
Clarksville, TN: -7.6%
New Orleans, LA: -7.4%
Punta Gorda, FL: -7.4%
Austin, TX: -6.2%
Florida markets like North Port (-5.8%), Cape Coral (-5.5%), and Panama City (-4.9%) also rank among those with significant condo price drops.
Meanwhile, condo values have seen the largest gains in the following markets:
Torrington, CT: +11.8%
Hartford, CT: +11.6%
Atlantic City, NJ: +11.3%
Norwich, CT: +10.9%
New Haven, CT: +10.5%
For single-family homes, the highest year-over-year gains occurred in:
San Jose, CA: +12.2%
Rockford, IL: +11.6%
Syracuse, NY: +11.4%
Hartford, CT: +10.2%
San Diego, CA: +10.0%
The steepest declines in single-family home prices occurred in:
New Orleans, LA: -5.8%
Lake Charles, LA: -4.7%
Punta Gorda, FL: -4.4%
Austin, TX: -4.4%
Alexandria, LA: -4.3%
The Bigger Picture
The gap between condo and single-family home price performance is not limited to Florida. Across the U.S., single-family homes have generally outperformed condos over the past year. Notably, there are no major markets where condo prices are rising while single-family home prices are falling.
Florida’s condo market remains under pressure as affordability challenges and regulatory changes take their toll. The correction reflects a broader rebalancing in the housing market, with rising costs and structural concerns reshaping demand for condos, especially older coastal properties.
Forward Looking Projections
Projecting the 2025-2026 real estate landscape in America requires a nuanced approach, considering regional variations and evolving economic factors. While a nationwide slowdown is anticipated, some areas may experience more pronounced effects than others.
Sun Belt States (Florida, Arizona, Texas, Nevada):Â These states, which saw explosive growth during the pandemic, are expected to experience a cooling trend. Increased inventory, affordability challenges, and potential insurance hikes could lead to moderate price growth or even stagnation in some areas. However, strong population inflows and job markets may still provide underlying support, particularly in cities with robust economies.
Ohio:Â Â Ohio's real estate market is poised for steady, moderate growth. Affordability remains a key advantage, attracting both first-time homebuyers and investors. Cities like Columbus and Cincinnati, with their diverse economies and growing populations, are likely to see continued appreciation. However, areas with stagnant job markets may experience slower growth.
California:Â California's housing market is expected to remain split. High-demand coastal areas like Southern California will likely see continued price appreciation, fueled by limited inventory and strong economic fundamentals. However, affordability concerns and out-migration trends could temper growth in some inland regions.
North Carolina:Â North Carolina's appeal lies in its combination of affordability, job growth, and quality of life. This is expected to drive continued demand and moderate price increases, particularly in urban centers like Charlotte and Raleigh-Durham. However, rural areas may experience slower growth.
Connecticut:Â Connecticut's market is projected to remain relatively stable. High home prices and a slower economic recovery compared to other states may limit price appreciation. However, desirable areas with good schools and proximity to major employment centers could still see moderate growth.
Climate Hazard Areas to Watch
The increasing frequency and severity of climate hazards like hurricanes, flooding and tornadoes are poised to reshape the real estate market across the United States, with significant implications for states like Texas, Florida, Georgia, South Carolina, Massachusetts, New York, Arizona, California, Tennessee, Kansas, Nebraska, Oklahoma, Kentucky, Louisiana and Washington.
Particularly, coastal regions such as Florida, Texas, Georgia, South Carolina, Louisiana, New Jersey, Massachusetts, New Jersey and New York, face heightened risks from hurricanes, flooding and rising sea levels. Properties in vulnerable areas may experience declining values, higher insurance premiums, and increased difficulty securing mortgages. Demand could shift towards inland areas or properties with robust flood mitigation and climate hazard measures. Use Interactive Map Tools Explore Weather and Climate Hazard Costs in America by State (NOAA data updated monthly).
Texas faces a dual threat from hurricanes along its Gulf Coast and tornadoes in its interior. This could lead to localized market fluctuations, with areas prone to these hazards experiencing decreased demand and price depreciation. However, resilient infrastructure and proactive mitigation strategies could mitigate these impacts.  Â
In the West, Arizona and California grapple with wildfires and droughts. Areas with high fire risk may see declining property values and increased insurance costs. Water scarcity could also impact desirability, particularly in regions dependent on groundwater. However, proactive fire prevention measures and water conservation efforts could mitigate these effects.  Â
Washington state faces diverse climate hazards due to its varied geography, ranging from coastal areas to mountainous regions and arid plains. The state is increasingly experiencing the effects of prolonged droughts, which threaten water supplies and agriculture in its eastern regions. Wildfires, fueled by hotter, drier summers and dense forests, have become more frequent and destructive, particularly in central and eastern Washington. Heavy rainfall events and melting snowpack often lead to flooding and landslides, particularly in areas with steep terrain like the Cascades. Coastal communities face risks from rising sea levels, storm surges, and erosion, threatening infrastructure and ecosystems. The state is also vulnerable to heatwaves, which strain public health systems, especially in urban areas unaccustomed to extreme heat. These climate hazards highlight the need for robust mitigation and adaptation efforts across Washington's diverse landscapes.
Louisiana faces significant climate hazards that pose ongoing challenges to its residents, infrastructure, and economy. The state is highly vulnerable to hurricanes, with its low-lying coastal regions frequently bearing the brunt of severe storms like Hurricane Katrina (2005) and Hurricane Ida (2021). These storms bring devastating storm surges, flooding, and wind damage, exacerbated by Louisiana’s extensive wetlands and proximity to the Gulf of Mexico. Sea level rise and coastal erosion further threaten communities and ecosystems, with Louisiana losing land at one of the fastest rates in the U.S. Heavy rainfall events, intensified by climate change, often lead to flash flooding in urban areas, overwhelming drainage systems. The state also faces heatwaves, which stress public health and agriculture, particularly during summer months. These hazards, combined with the challenges of adapting to climate change, demand proactive measures to mitigate risks and protect vulnerable populations. Use Interactive Clean Water and Utilities Map (NOAA data updated monthly).
New Jersey faces a range of climate hazards that increasingly threaten its communities and infrastructure. Coastal flooding and storm surges, exacerbated by rising sea levels, pose significant risks to the state’s densely populated shoreline, particularly during hurricanes and nor’easters, such as Superstorm Sandy in 2012. Inland flooding from heavy rainfall events is also a growing concern, with rivers and urban drainage systems frequently overwhelmed. Heatwaves, intensified by climate change, present public health risks, especially in urban areas with heat islands like Newark. Winters are becoming less predictable, with more frequent extreme weather swings, including heavy snowstorms and icy conditions. Additionally, coastal erosion and saltwater intrusion threaten ecosystems and water supplies in vulnerable areas. These challenges require comprehensive adaptation and resilience strategies to protect New Jersey's residents, environment, and economy.
Overall, climate hazards are introducing a new layer of complexity to the real estate market which are increasingly driving climate migration. Buyers and sellers must carefully assess risks, consider mitigation measures, and factor in potential long-term impacts when making decisions. Proactive planning and adaptation will be crucial for navigating this evolving landscape.
Overall Outlook:
The 2025-2026 real estate market in America is likely to be characterized by moderation and regional variations. While some areas may experience price corrections due to elements such as climate hazards, rising cost of living, others will continue to see steady growth. Factors to watch include inventory levels, interest rates, economic conditions, and migration patterns. Buyers and sellers should carefully analyze local market dynamics to make informed decisions. Notably the issues of clean water scarcity and pollution are fast becoming significant challenges worldwide.
About Author
J Dean, Director ... J Dean delivers over 40 years of experience across a wide range of industries worldwide. He is considered by many to be a leading research expert in the energy industry, healthcare, sports, environmental studies, business market analysis, eCommerce and AI technology solutions. Mr. Dean has been a frequent Evangelist at conferences and angel investor. Currently, among the many projects, J Dean is focused on enhancing Digital Content Networks and Blockchain Tokenized Asset Programming Solutions. He is a graduate of Boston University. J Dean enjoys collecting antiques, historical vintage items, travel and sports fitness. Email Us
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